Jefferies finds Adani Green Energy shares trading at 63% discount. Check target price – News Air Insight

Shares of Adani Green Energy rallied as much as 5.6% to their day’s high of Rs 1,034.5 on NSE on Friday, September 19, after the market regulator Sebi gave a clean chit to Gautam Adani, his brother Rajesh Adani, and some Adani Group companies in the allegations made by US short-seller Hindenburg Research. The regulator said there was no proof of wrongdoing in the case related to the allegations made by the US short-seller in January 2023.

Despite the surge, Jefferies believes that the stock is trading at a 63% discount to its January 2023 peak on a one-year forward EV/EBITDA basis, leaving room for upside if execution stays on track. The international brokerage has a target price of Rs 1,300, implying an upside potential of 33% from the current market levels.

The brokerage expects capacity to rise 3.5x from 14 GW in FY25 to 50 GW by 2030, with 31.5 GW already locked under long-term power purchase agreements. Of this, 30 GW is being developed at Khavda, which has among the best solar irradiation levels in India after Ladakh.

Also read: Adani Power shares soar 9% as Morgan Stanley initiates coverage with ‘Overweight’ rating, 30% upside seen

Jefferies projects additions of 4.5 GW in FY26 and 6.3 GW in FY27, with management reiterating its 5 GW guidance for FY26. Utilisation levels are expected to improve to above 30% from 24.8% in FY25.

A promoter infusion of Rs 9,350 crore through warrants has supported the balance sheet, analysts say. Net debt to equity is projected to ease from 6.9x currently to 5.4x by FY30, while net debt to EBITDA should improve to 6.9x from 8.3x. Over 80% of installed capacity is tied up under 25-year power purchase agreements or PPAs, providing strong cash flow visibility.Since January 2023, capacity has risen 120% to 16.1 GW even as market capitalisation is 46% lower. EBITDA grew at a 36% CAGR in FY22-25 and is expected to rise 30% annually over FY25-28. The price target implies an upside of 33% from Thursday’s closing price.With a price target of Rs 1,300, Jefferies is valuing the stock at 20x EV/EBITDA on September 2027 estimates, a premium to JSW Energy at 15x given Adani Green’s growth profile and pure renewable focus.

The risks flagged by the international brokerage include execution delays at Khavda and any adverse outcome from the ongoing US investigation.

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Q1 Performance Snapshot

Adani Green Energy reported a 60% year-on-year (YoY) growth in its Q1 consolidated net profit at Rs 713 crore, compared to Rs 446 crore in the same period last year. Power supply-driven revenue jumped 31% YoY to Rs 3,312 crore in Q1FY26, up from Rs 2,528 crore in the year-ago period.

The company’s total income stood at Rs 4,006 crore, up 29% from Rs 3,112 crore reported in the corresponding quarter of the previous financial year. The company also earned Rs 429 crore from the sale of goods/equipment and related services.

At about 11:35 am, shares of the company were trading at Rs 1,006, higher by 2.8% from the last close on the NSE. Adani Green Energy shares have fallen nearly 50% in the last 1 year.

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